Beginners Series Webinar: Join us on Monday, November 10th at 2 PM (ET) for our NDW Beginners Series Webinar. The week's topic is: Understanding Relative Strength (RS) & the Matrix. Register Here

In our latest podcast, we explore various topics including the growing strength of international equities, reflected on the Asset Class Group Scores page. These equities are commonly split up between two major groups: Developed Markets and Emerging Markets. Developed Markets include countries such as the United States, Canada, the United Kingdom, and Japan—economies characterized by high income levels, advanced financial systems, and stable regulatory environments. In contrast, Emerging Markets encompass countries like China, India, and Brazil, which generally feature lower to middle-income economies, developing financial markets, and higher growth potential.

Historically, both groups have faced challenges, with average group scores lingering below 4.0 for several years.  That trend shifted in June 2025, when both groups moved above an average score of 4.0 on the ACGS page and have remained there since then, signaling sustained strength in international equities. With both groups in actionable territory, the question becomes: where should in investors focus when adding international exposure?

The chart below highlights every instance, excluding one-month clusters, where the group’s average score crossed 4.0. Using the iShares Core MSCI Emerging Markets ETF (IEMG) and Vanguard FTSE Developed Markets ex-US ETF (VEA) as proxies, we analyzed the forward returns at multiple intervals to provide some historical context.

Emerging Markets (IEMG): The 6-month average return following these signals was an impressive 8.03%, though the 1-year return cooled to 6.83%.

Developed Markets (VEA): Forward returns were muted or slightly negative, presenting a stark contrast to IEMG’s performance.

While results are skewed by the 2008 financial crisis, it’s worth noting that international equities tend to be volatile. Still, given this year’s strong performance, one must ask: Is this time different?

The chart above shows the rolling 6-month returns for IEMG and VEA since the early 2000s. Both categories recently approached a 40% rolling six-month return, a level reached only a handful of times historically. The trend clearly favors Emerging Markets over Developed Markets ex-US. In addition, the IEMG fund currently has a fund score of 5.58, versus VEA’s fund score of 4.47.

Bottom line, historical results and current market conditions point to Emerging Markets as a compelling option for investors seeking international diversification. While volatility and macro risks remain present in international markets, positioning yourself tactically can provide upside potential as well as diversification benefits

U.S. Equity indices were negative through Thursday’s close with the S&P 500 Index (SPX) falling 1.75%. With indices kicking off November moving to the downside, short and intermediate-term indicators, along with a few long-term, responded in kind; in some cases, compounding downward pressure that began in prior months. While there was a variety of universes in which action was witnessed during the past week’s trading, the primary focus will be upon the popular NYSE Universe.

Action last week led to the initial reversals into Os on the 10-week (^TWNYSE), 30-week (^30NYSE), and 40-week (^40NYSE) indicators, suggesting that stocks were dropping below their 50-day, 150-day, and 200-day moving averages. November’s action brought additional downside to all three indicators with the 10-week dropping to the mid-30s, while the 30- and 40-week settled in the lower 50s. This places all three, slightly above or near the mid-October low levels and suggests intermediate and long-term moving averages remain intact for a majority of the roughly 1800 stocks, but roughly one-third of the names trade above their 50-day moving average and the middle of the 10-week trading band.

 Along with the indicators focused on the major moving averages, the bullish percent for NYSE stocks (^BPNYSE) saw additional downside action in November. The BP fell below 50% for the first time since May and moved to bear confirmed status after having been in a bullish position since April. With a current reading of 48.41% as of Thursday’s (11/6) close, less than half of the roughly 1800 names within the NYSE universe maintain a buy signal on their default point and figure chart. While not shown, it is worth noting that the multiple sell signal for the NYSE (^BPMSNYSE) – which measures the percentage of stocks maintaining consecutive sell signals – is within one box of seeing a reversal for the first time since April of this year, suggesting an uptick on stocks that have given consecutive sell signals on their point and figure chart.

The decrease in participation shown by the aforementioned indicators highlights the near- or intermediate-term breakdown in certain stocks. In most cases, the long-term bullish support line remains intact, which has kept the positive trend for the NYSE (^PTNYSE) in a column of Xs, though the actual reading of the indicator has fallen from its rally high mark in August at 56%.

The indicators discussed have been looking at the trending picture on the default point and figure chart. While slower moving, relative strength indicators like the RS in Xs for the NYSE (^RSXNYSE) reversed down into Os to 46%, coming down from the recent high mark of 52% in September. For those not familiar with the RS in Xs indicator, it measures the percentage of stocks that maintain positive near-term relative strength against the market as defined by the S&P 500 Equal Weight Index (SPXEWI). Bear in mind that this indicator tends to occupy most of its time, especially in recent years, in the mid-30 to upper-50 range, so the RS in Xs currently resides in a “middle of the field” position. A dip below 40% on the chart would bring the chart to levels not seen since earlier this year.

After having discussed the impact on indicators with action over the past week, below are examples of stocks that contributed to the downside in the aforementioned indicators.

DoorDash (DASH) – Restaurants – DASH reported earnings after close on Wednesday, missing on the bottom line and announcing a spending plan that failed to impress investors. Shares fell 17% as of Thursday’s (11/6) close, bringing the chart from $236 on the chart down to $196. Violating support at $236 and falling below prior rally highs from earlier this year around $210. The notable downside magnitude for DASH brought both the market and peer RS charts into Os, dropping the stock down to a 3 for 5’er for the first time in more than 12 months. DASH now sits one box above the bullish support line on the default point and figure chart and a move below $192 would violate the trendline, which if violated, would drop the stock to a 2 TA rating. From here, support beyond the bullish support line resides in the $170s range.

Norwegian Cruise Line Holdings (NCLH) – Leisure – NCLH reported a topline miss and was light on its Q4 outlook Tuesday (11/4) morning, sending shares down more than 15% for the day. NCLH dropped from the lower $22 level to below $19 on the default point and figure chart. This action was enough to send the market and peer RS charts into columns of Os and to flip the peer RS chart to an RS sell signal. Wednesday’s (11/5) action brought the stock below $18.50 on the trend chart, violating the bullish support line and bringing NCLH down to a 1 for 5’er for the first time in 12 months. Notable resistance has been in place in the upper $20s since late 2021 and continues a period of rangebound trading. Support for the stock now lies in the $17 range, while additional can be found at $15.50 on the default trend chart.

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